Sometimes, it’s all about the framing. The media is doing a disservice to its framing of the climate change issue. BSNL is framing its loose privacy standards as a way to justify its competitive position. As for Amazon, it’s now finding that the way it framed its relationship with Narayan Murthy’s Catamaran Ventures to sidestep India’s FDI rules has come crashing down.
Bucking under pressure
On Monday, Amazon India and Catamaran Ventures, a venture capital fund set up by Infosys founder NR Narayana Murthy, said that they have mutually agreed to end their seven-year joint venture Prione Business Services. The news sent shockwaves across the e-commerce industry.
Prione’s primary business is to sell services to sellers—onboarding them, helping them market through ads, etc. But it also houses Amazon’s biggest seller, Cloudtail. Cloudtail and another seller, Appario, formed out of a similar joint venture with the Patni Group, together account for 35% of all sales on Amazon India. The two companies source goods from Amazon’s wholesale subsidiary and sell them on Amazon.in. In simplified terms, Amazon buys from Amazon (B2B) and sells on Amazon (B2C).
This has been a bone of contention between Amazon and many online sellers, who claim the company is giving preferential treatment to Cloudtail.
According to Indian laws, foreign marketplaces like Amazon are not allowed to have any influence over the sellers. So, in 2014, Amazon entered into a JV with Catamaran to sidestep these foreign investment regulations. And over the years, the company significantly reduced its stake in the joint venture to ensure it does not look that way on paper. Amazon has reduced its stake from 49% in 2014 to 24% in 2019, increasing Catamaran’s stake to 74%.
Now, while Murthy is a respected figure in the Indian business community, the Indian seller community hasn’t taken too kindly to his role in “destroying” them.
In fact, Amazon entered into the relationship because of Murthy’s street cred. The Ken had written about this in 2018.
Now, the loophole Amazon managed to create has come full circle.
Incidentally, the announcement of dropping the JV was made a few hours after the Supreme Court of India refused to halt antitrust probes against the country’s largest e-commerce companies on Monday.
The fate of Cloudtail is still unclear. In the press statement released by Catamaran and Amazon, Cloudtail was not mentioned even once.
The Ken has learnt that Prione CEO Pankaj Jather, a former Amazon executive, held an all-hands meeting with employees on Tuesday morning to quell any concerns of job cuts, salary cuts or even changes in roles going forward. Jather did not update on how the nature of business will change post-May 2022, when the contract between the two companies lapses. Out of the 3,000 Prione executives, more than 1,500 employees work with Cloudtail.
Some industry executives are predicting that Amazon could go the Flipkart route now by completely detaching itself from sellers in terms of ownership, and ask brands to sell directly to sellers whose inventory it can control. “It is like how Flipkart’s WS Retail disappeared and 10 smaller WS Retails replaced them,” said an industry executive.
After all, if Amazon could figure it out once by doing something as complex as this…
…it can most likely do it again in another form.
The Ken has reached out to Prione for its comments. We will update the story once they respond.
We can still save our planet
Here’s what my Twitter feed looked like yesterday. A sea of brown and red. All thanks to a report on climate change published by the United Nations’ Intergovernmental Panel on Climate Change (IPCC).
The IPCC, which consists of 234 volunteer scientists, published this gold standard summary report of climate science after seven years, and after combing through over 14,000 research papers—saving everyone else the time and effort. The short version of it is that humans have continued to heat up the world (it’s up by 1.1 degrees Celsius since the 19th century), primarily due to our unsatiated appetite for energy. We need to stop our dependence on fossil fuels almost immediately for the planet to have a future.
IPCC was soon trending worldwide, and it even tweeted about the overwhelming interest in the report, giving a direct link in case the website crashed due to traffic.
It sounds scary. So people are taking this seriously.
But how the media frames something like this can also have a long-lasting impact on both individual and policy decisions. Take a look at the tweet by NYT in the image above again. By saying that climate change cannot be stopped and that it is locked in, NYT paints a very dismal, and incorrect, picture that gives rise to conversations around — “if it’s locked-in, why would we bother further destroying economies/lives to try to stop it?!” Those lives being referred to are the over 9.8 million jobs that the oil and natural gas industry is said to support in the US. Or in other words, nearly 6% of employment.
Here’s another doomsday headline on the front page:
And it’s not the first time the media has gotten into problematic framing of climate change matters.
Remember 26 May, when oil company Exxon Mobil’s directors were ousted by a small hedge fund, which felt that enough wasn’t done to transition to a cleaner energy company (BFO#293)? And the same day, climate change activists won against other Big Oil companies, Shell and Chevron.
Well, here were the headlines in the global media on that day:
As Emily Atkin, who runs the climate change newsletter Heated pointed out,
Maybe the framing around the IPCC report should’ve been, “We’re heading towards a climate catastrophe. We can prevent it by cutting out oil and gas. And just caring more for the future of this planet!”
That way, we’re striking at the heart of the matter. But importantly, framing it to give hope for the future.
Otherwise, this is what we’re looking at:
PS: Saudi Arabia’s state-owned oil giant Aramco reported earnings over the weekend. Its net income rose by nearly 300% over the same quarter last year. And what will it do with bumper profits? Well, it said that it’ll expand its ‘sustainability’ programme.
Bharat Sanchar Nigam Limited (BSNL) is an Indian government-backed telecom and internet provider that’s still holding on for dear life in the cutthroat telecom war. But it seems like this legacy telco has been up to something else.
On Monday, the Internet Freedom Foundation (IFF), an Indian organisation whose objective is to fight for online freedom and privacy, reported on BSNL’s continued practice (since 2015 at least) of injecting certain code into its users’ data streams.
What does this code do?
Well, for one, it can display intrusive ads. But it can also be used to gain unauthorised access to systems, slide in malware, and affect the safety of data. To make matters worse, IFF’s analysis suggests that while data that’s usually shared with advertisers is aggregated to prevent them from directly identifying the user, BSNL seems to be sharing this unique browsing data directly as well.
All this is supposed to be illegal under various Indian regulations, and a violation of privacy. But that hasn’t stopped BSNL, replying to a query made under the Right to Information Act, from agreeing to the code injections by saying that, “providing information on BSNLs engagement in the insertion of browser injections or code injections would violate ‘commercial confidence’ and harm BSNL’s competitive position.”
While one can wonder what its competitive position in today’s telecom landscape is, the unfortunate truth is that a state-backed entity is resorting to active snooping to make some money. And the mainstream media doesn’t want to talk about it.
That’s it for today.
Don’t forget to write in with your thoughts and observations on the reshaping of businesses, societies, and economies. We will be back tomorrow.